If you have been thinking about buying a home this fall, you have probably seen the headlines about mortgage rates. The 30-year fixed rate averaged 7.40% in Freddie Mac's survey for the week of October 15, the same as the week before and up from 7.03% in late September. That is a real jump, and it is completely normal to feel a little uneasy about it.
Here is the good news. Higher rates have also changed the market in ways that can work in a buyer's favor. If you go in with a clear plan, this fall can be a great time to find the right home from Palo Alto to San Jose.
What the market looks like right now
In Santa Clara County, the median single-family sale price in September was $1,965,500. That is up 3.8% from August and down 1.5% from September 2025. The bigger story is inventory. There were 993 active single-family listings in early October, up 18.6% from a year ago. Homes sold in a median of 26 days, compared with 25 days last year.
In plain terms, buyers have more homes to choose from than they did a year ago, prices have leveled off compared with last fall, and you have a little more breathing room to make a decision. Good homes in great school areas still move quickly, but not every listing turns into a bidding war.
Step 1: Start with a fully underwritten pre-approval
With rates moving week to week, a solid pre-approval from a local lender is your most important tool. Ask your lender to run your numbers at today's rate and at a slightly higher rate so you know your comfortable range either way. Sellers in Silicon Valley take a fully underwritten pre-approval seriously, and it gives you confidence when the right home comes along.
Step 2: Ask about rate buydowns and seller credits
When a home has been on the market a few weeks, sellers are often more open to credits. A seller credit can be used to buy down your interest rate, either permanently or temporarily for the first year or two. Even a small reduction in your rate can make a meaningful difference in your monthly payment. Your lender can show you exactly what a credit would do for you before you write an offer.
Step 3: Plan for a refinance, but do not count on it
You may hear people say "marry the house, date the rate." There is some truth to it, since many buyers refinance when rates come down. The smart move is to buy a home whose payment works for you today. If rates fall later, a refinance becomes a nice bonus instead of a necessity.
Step 4: Use the extra inventory to be selective
With more listings available, you can take a little more time to compare neighborhoods, commutes and schools. Think about what matters most, whether that is being close to Caltrain in Mountain View, a short drive to Apple in Cupertino, or a yard and good schools in Campbell or Los Gatos. Make a short list of must-haves and nice-to-haves so you can move confidently when the right home appears.
Step 5: Write a clean, smart offer
Even in a calmer market, the strongest offers are clean and well prepared. Review the seller's disclosures and inspection reports before you write. Talk with your agent about which contingencies to keep, such as your loan and appraisal contingencies, and how long each one should be. On homes that have been sitting, you may be able to negotiate on price, credits or repairs. On homes that are brand new to the market, you may still need to compete.
Step 6: Look into down payment help
If you are a first-time buyer, ask your lender about programs from the California Housing Finance Agency (CalHFA), including the California Dream For All shared appreciation loan, which can help with down payment and closing costs when funding windows open. Eligibility rules and income limits apply, so it is worth checking early.
The bottom line for buyers
Rates above 7% are not the whole story. More homes on the market, steadier prices and sellers who are more open to credits can add up to a real opportunity for prepared buyers. The key is knowing your numbers and having a plan before you start touring.
Ready to start your search? I would love to help you put together a game plan. Book a free buyer consultation and I will set up a custom home search for the Palo Alto to San Jose neighborhoods you love, so you see new listings the moment they hit the market. Book your free buyer consultation!
